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Software groups warn of FTA dangers

The US-Australia Free Trade Agreement poses a grave threat to the entire Australian software development industry due to the legal framework on intellectual property which is required upon adoption of the pact, the Open Source Industry Association and Linux Australia have warned.

In a statement issued in Melbourne today, both organisations said the FTA would hamper Australia's ability to efficiently compete in global markets. "Much like the introduction of a flawed patenting regime for pharmaceuticals, adoption of a flawed patent regime for software is not in Australia's interests," the statement said.

Brendan Scott, a spokesman for the groups and a lawyer himself, said the effects would be felt by all developers, not merely those who worked with open source software.

He said the wording in the FTA suggested Australia's software patents law and US laws would be harmonised. "The US patent system for software has been broadly condemned as flawed by many industry observers, even by the former Patent and Trademark Office director himself," Scottt pointed out.

He said any non-trivial piece of software could contain as many as thousands of code processes, algorithms or software modules, any one of which could infringe one or many US software patents.

"Most Australian developers have probably built products which 'infringe' on US software patents. Introducing a system which makes it simpler for these patent holders to bring such legal hooks into Australia is very damaging to the local industry," Scott said.

He pointed out that Australian developers would face huge fines if they recreated software processes while being unaware of the possibility that they may been patented. "Ignorance of such patents is no excuse. In future, Australian developers may not be able to make any software without the fear of paying ransom," he warned.

Scott said a majority of local developers lacked the money and time needed to check their software code-bases against the tens of thousands of software patents which could flood the market if Australia degraded its stringent software patent laws.

"US patent law allows for the imposition of punitive damages. If Australia adopted a similar law, local developers could be sued for many times more than any actual 'damages' they may have caused the patent holder, merely as a warning for others," he said.

He said huge software houses had the resources to obtain patents. "The introduction of US-style software patenting will therefore be a one-sided affair, and definitely not in the local industry's favour," he cautioned.

Even if an Australian developer owned a patent, he or she, in most cases, would not have the money and time to pursue a case against a big company. "Most software patents are owned by huge ICT firms, which keep them to be used when necessary to do an opponent serious damage or for legal leverage in deal negotiation. They are not used to 'extend the art and science' of technology," Scott claimed.

He was of the opinion that a large number of software patents in the US had been granted for processes or algorithms which are exceptionally vague or, even worse, quite obvious to most competent software development practitioners.

"They should not have been granted in the first place, as they are not 'novel'. By degrading Australia's patent system to match the US
approach we will handicap our local developers needlessly."

Scott also warned that there were an equal number of issues which would arise with the introduction of DMCA-style legislation, also mandated by the FTA. "...anything which stops academic research into security and which also stops any endeavour towards software interoperability engineering is a serious problem for R & D in this country," he said.

He was referring to the Digital Millennium Copyright Act which was signed into law in the US on October 28, 1998. The DMCA's stated purpose is to update US copyright laws for the digital age.

Both organisations said they backed the proposals made by David Vaile of the UNSW's Baker & McKenzie Cyberspace Law and Policy Centre as a means of starting to tackle the problems posed by the FTA.

Vaile's proposals:

Tighten the criteria for software and 'business process' patent applications.

Establish a public interest litigation fund to enable Open Source software developers, integrators or users to respond to anti-competitive and tactical patent infringement claims, if they would otherwise be unable to do so.

Official support for global 'prior art' research projects to assist research of the viability of such claims.

Change the IPaustralia.gov.au page to make lodged patents easier to track, so that developers can protect themselves from bogus patents.

Limit the implementation of controversial DMCA-style laws, to the extent they'd inhibit development of open, compatible tools for common file formats and networks.